Iowa Southern Utilities Co. v. United States

OPINION

WIESE, Judge.

Plaintiff, a public utility, was permitted to add a surcharge to the cost of its electric service to defray the financing expenses associated with the construction of a new power plant. The regulatory order authorizing the surcharge provided that the amounts collected would be “refunded” to the utility’s customers in the form of reduced rates during the thirty-year period following completion of the plant. The issue in the case—presented here through cross-motions for summary judgment—con*870cems the proper tax treatment of these surcharges.

Plaintiff contends that the…